Committee Passes Bill to Help City Investments
A bill that passed a House committee Wednesday could open the door for local governments when it comes to investments and improved rates of return. Representative Steve Riggs (D-Jeffersontown) and KLC Deputy Executive Director J.D. Chaney spoke before the House Committee on Local Government Wednesday afternoon in support of House Bill 75. The bill gives local governments more options for investments and removes some restrictions on securities. Representative Riggs told the committee, “That’s what everybody is fighting for, a better rate of return.” His bill gives cities a better opportunity to earn income through responsible investing.
Committee chair Representative Rob Rothenburger (R-Shelbyville) spoke out in support of the bill. He served as Shelby County Judge/Executive for 13 years until he was elected to the House in 2016. “I want to thank you for bringing this bill out,” he said. “I would have liked to have seen it 10 years ago, before the recession ended.” Rothenburger acknowledged local governments struggle to earn returns on current investment options.
Chaney told members of the committee the current investment restrictions haven’t changed since 1994. Cities face looming pension cost increases and other financial pressures with limited revenue options. The bill could provide some much-needed options. “It will, in a responsible way, provide us an opportunity to get a higher yield on some of these investments, which we’re going to desperately need,” Chaney testified.
Representative Riggs reminded the committee there would still be some safeguards in place to ensure investments were not too high-risk. They would have to be graded by a competent rating agency and there would be limits on how much could be invested in any one investment type. Chaney told legislators KLC supports the bill. “We wholeheartedly endorse the legislation, along with the judges and others,” he said.
Members of the committee were unanimous in passing the bill. Representative Riggs told members he wants to add a technical amendment before it goes to the full House for consideration.